As many of you know, California’s new AB5 Law is in full swing. It has taken California, and especially Los Angeles based small businesses, by storm forcing many of these businesses to employ workers who were previously classified as independent contractors. To alleviate some of the burden, our attorneys have compiled all of the required (and optional) steps and documents to comply with state and federal employment laws. We call it the “2020 California Employer Compliance Kit” and is available upon request.
Who Must Comply?
The presumption is that all workers are employees. This means that any new worker that a California business aims to bring on board will be presumed to be an employee unless the employer can prove all of the following (in other words, to classify someone as an independent contractor, the business must prove all three of the following tests):
(1) Worker is free from control and direction while performing his/her work
(2) Worker performs work that is outside the usual course of your business
(3) Worker is customarily engaged in an independently established trade, occupation, or business of same nature (with preferably other clients and having a license to perform the services).
If you cannot satisfy all of the above tests, and therefore must classify the worker as an independent contractor, you must have all of the employment requirements in place to protect your business from stiff penalties. Some of the most common requirements include Wage and Hour laws, but do not neglect others such as an employee handbook, overtime/medical leave policies/procedures, offer letter with at-will language, training and posting requirements, etc. Please note that there are exceptions to AB5 that are buried within the law. Call us with any specific questions.
Sexual Harassment Prevention Training Requirement
In addition, another new law that affects small businesses is the Sexual Harassment Prevention Training requirement also effective January 1, 2020. Any business with five or more employees, including temporary or seasonal employees, must provide sexual harassment prevention training within 30 days of hire or within 100 hours worked if the employee will work for less than six months. The law requires at least two hours of training for supervisors and at least one hour of training to all non supervisory employees. Compliance is required by January 1, 2020 and once every two years thereafter.
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